Do you ever wonder if you or your business were sued, if you’d have enough liability insurance to protect your business? Umbrella insurance is a way to almost guarantee that you’re always protected. Learn more about this affordable but valuable insurance policy.
What it Is
An umbrella policy is extra liability insurance beyond what is available on your regular policy. It’s can be purchased as an addition to your auto, homeowners, boat or commercial insurance policy. Umbrella policies cannot be purchased as a separate policy, but can only be bought after you’ve already bought a regular insurance policy with a specific amount of liability insurance.
Who it Covers
Umbrella insurance provides liability coverage for you, your family or your business. It protects you against situations where you may be liable for damage to others or their property. In addition to covering you against certain lawsuits, it may also help with lawsuit-related legal expenses. It’s there to protect you if you’re sued for an amount higher than what your original policy covers you for. Property owners with rental properties often purchase umbrella policies to offer themselves additional coverage.
How They Work
Say, for example, you’re sued for $250, 000, and your regular policy only carries $100,000 of liability, but your umbrella policy is for $500, 000. The first $100,000 comes from your regular policy, and the remaining $150,000 come from the umbrella policy.
Types of Coverage
Umbrella policies provide help for paying lawsuit-related settlements. They also pay legal expenses, court fees and injury-related medical bills. Umbrella policies can also protect you if you’re sued for slander or libel. Anyone who is sued can benefit from an umbrella policy, particularly since lawsuit settlements are often in six-figure amounts.
The largest benefit of umbrella policies is that policyholders can rest assured knowing that if they are sued, they won’t lose everything they’ve worked to attain through a lawsuit settlement. The umbrella policy will help in paying off an unfortunate lawsuit. Umbrella policies are relatively inexpensive in comparison to other policies, so many individuals and business owners purchase a small regular policy and a larger umbrella policy.